Plandai (PLPL) Poised: One For Two On Bounces

One For Two

In the last week I’ve made the call on two different stocks that were streaking, and corrected to provide a better entry point for those who either missed the first run, or traded out for a profit.

One gigantic win, and one fizzled. In Major League Baseball with a bat in your hand, that will get you millions. In small stocks, it’s still pretty darn good- after all, stocks go only go to zero- there’s no ceiling as to how high they can go.

My win- calling the bounce in Luxeyard (LUXR)- which looks like it could make a new all time high today or tomorrow. As I disclosed in a previous edition, I sold some of the shares I own the last time the stock was close to the $1.20 level- I still own most of it- not this time- I believe the stock is destined to surpass $1.50 and might even find $2. Putting all the ups and downs aside, I picked it at $.80 on April 12th- $1.15 today for a 44% gain.

Yesterday call for a bounce on American Liberty (OREO) was premature- it appears I missed it by a day. If you pick it up on the open, you’re in at $1.40- now $1.30, but below my SSL of $1.30, so you might be out. The stock could still set up for a rally, and the volume is coming in nicely.

Perhaps unnoticed in yesterday’s trading was the big bounce in Nuvilex (NVLX)- which I called at $.06 back on March 18th. I’m sticking with this one for six months. I love the technology they’re working on. The stock has been quiet of late, but hit $.077 yesterday on huge volume- interest in surfacing. Net gain on that one 28% from day 1.

The Next Bounce: Plandai Biotech (OTC BB: PLPL)

I’m calling it – right here, right now. It’s sometimes tough to call the streaking stocks- up and down. Sometimes you just don’t hit the number perfectly. So, if you want to make money, and want to get in ahead of the crowd, perhaps it makes sense to look at one that is quiet, down, under followed, and no one wants. Then, when the market goes nuts for the stock, you can be a seller and notch some significant gains when everyone else is piling in.

I’d ask you to look back at my presentation on Plandai Biotech (PLPL)- back on March 26th. If you want to read the original presentation, simply go back and click on the date. At the time, the stock was $.25, and it’s quietly hovering just above my SSL of $.18- $.20 bid- but offered at $.245- we started at $.25, so no damage done on this one- still plenty of upside.

If you read the original presentation, this company is a combination Ag/Technology story that has developed a revolutionary new method for processing Green Tea Extract- a substance that is in high demand. This company is making the stuff 10 times more powerful than anyone else on Earth.

The company will be commercializing its product in South Africa with a debt financing of $13 million from the South African government, but the loan has not closed yet. When it does, I suspect the stock will go bonkers. It’s impossible to predict how high it will go, but the stock hit $.75 when the agreement was announced.

Today- in quiet trading, it’s about $.25.

I can’t guarantee it will head back to $.75- but I suspect the company is getting very close to closing this transaction, and once announced the stock will have a new life.

So, it you’re tired of chasing these stocks up and down the charts and trying to get on the right side of a trade, you want to own this one ahead of the closing, which I believe is imminent. If just makes too much sense from an economic development stand point.

Accumulate PLPL today while no one is paying attention. Look what happened with NVLX yesterday. Others have surged out of nowhere. Have a 2 to 4 week window in time, but don’t be surprised if the fireworks happen in short order. It simply makes too much sense- the South African government needs employers in these ag regions, and this company is perfectly positioned to put a mere $13 million to work- that’s chump change on a government scale, but huge for PLPL shareholders.

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NVLX Inks Marketing Plan For Gentler Tattos–Stock Soars 37%

Say hello to an old friend, Nuvilex, Inc. (NVLX), a micro-cap stock we’ve been covering since 2007. Heading into trading today, shares of the emerging healthcare consumer products company sold for a ho-hum $.038.

In over two years, I’ve watched the stock start at $.18, hit a high of $.45, and sink to a recent low of $.03. By mid-day, shares rose 13% and finished up 37% higher ($.13) on some promising news.

Formerly EFoodSafety.com, Inc., Nuvlex reported today that one of its products, Infinitink (the world’s first permanent tattoo ink designed for easier removal) will be marketed, promoted, distributed and sold by Jayhur Enterprises in tatto-heavy Australia and New Zealand for the next five years.

So now we’ve got something to talk about. Nuvilex estimates that if Jayhur Enterprises
captures 30% of today’s market by the end of the agreement, the annual revenue could be as high as $3.75 million.

Get this…15% of Australia’s population over 15 years of age is considering a tattoo. Apparently, though, the permanent aspect of having “Mom” carved into an arm isn’t that appealing. These ‘fence sitters’ are excellent candidates for artists offering Infinitink tattoos. That group represents 25% of the over 18-year-old U.S. populatiJayhur Enterprises joins with MT.Derm, GmbH, Berlin, Germany as
Infinitink international distributors. MT.Derm owns Infinitink European distribution rights and since 2006 has been a development partner with Freedom2. Nuvilex is seeking a distributor for Latin and South America.

Infinitink was selected as one of Time Magazine’s ‘Products of the Year’ in its November 12, 2007 issue. Since then, Infinitink has undergone further testing and development and now some serious marketing efforts.

I don’t know how much higher the stock will go from here, but this could be the kickstart it needed to take off.

eFood- Finding a Bid and Conserving Cash

EFSF filed its 10Q quarterly financial statement on Friday, and the stock basically reflects the trailing numbers.

The top line was an anemic $200k, about half the same quarter a year ago. It’s clear the market has been telling us what the company has not- that there move to direct marketing for its flagship products has been a total failure.

I don’t know if they abandoned the whole thing early in the game, or if they pursued it into the fall. The last we heard, they were going to pursue radio as a direct marketing strategy. In short, it’s evident the program failed.

We have also heard nothing of the DR campaign for PurEffect to have been launched by CK41. Another major disappointment for long suffering shareholders.

There are two pluses- 1. They are still holding on to their valuable cash in a climate where cash has become a very scarce commodity. They are burning about $150,000 per quarter- with $1.2 million in cash, they can survive another 8 quarters without a capital injection.

The other positive is the stock. It has started behaving as if there could be a change in the wind. Here’s the chart:

For the second time in as many months, the stock is trying to get through the $.05 level. I don’t know if this means anything, but it is behaving as if someone wants to start buying, and no one is selling. I anyone who wanted to sell this stock for a tax loss has done so.

I am still rating the stock a hold simply because their cash gives them some time and flexibility to figure out a way to move things forward. I’ll have it when they do.

Comments and questions are welcome.

eFood- Rumors Of Their Death Have Been Greatly Exaggerated

eFood’s quarterly numbers came out yesterday, and I had a chance to review the 10Q filing this morning.

The company didn’t mention the revenue number in its press release, which I believe was simply absurd. Instead, it focused on the achievement of generating $5,400 in cash flow profits- which is certainly a step in the right direction.

Here’s how they arrive at that number- they take the loss of $500k, subtract off the loss the $505k in non cash expenses they booked, and come up with $5.4k more in cash than when they started the quarter.

Here’s what they didn’t bother to cover in the press release- revenues- revenues went from $321k this quarter in ’07 to $292k this quarter in ’08- a 10% drop in revenues.

So, where do all these non cash expenses come from, and how do they pay for them? Here’s where I was very pleasantly surprised-consulting expenses $552k- based on history, one would expect the company was handing out many millions of shares to whomever they pay to generate that expense. Not the case.

In fact, the number of shares I&O was 193 million- the shares I&O at the end of the last quarter- 192 million shares. This represents about .005% dliution- one half of one percent.

Therefore, over the past 3 months there was nearly zero dillution- that’s the first time this has happened in many quarters.

At the end of the quarter, the company still had about $1.76 million in cash and cash equivalents. Pretty darn good in light of the revenue number.

I must admit, I was very pleasantly surprised to see the number of shares I&O remain static. This bodes very well for the possibility of price appreciation when buyers come back to the market. They must have a big expense related to shares issuance that they are amortizing over a longer period of time.

From here on the big issue is revenues- can they drive increasing revenues from either their DR campaign, which has been revamped- or the wild card of PurEffect finally going to market in a major way?

I know many of you like to see a chart- and here it is:

Here’s a look at the last year of price performance. As you can see, it’s a mess, and trading at new all time lows.

For those of you who have chosen to hang in there, the company is still around, and still has a shot at getting that top line moving. They simply have to execute.

Just to clarify- I am not suggesting you need to buy the stock today. If you are still holding the stock, you are far from dead. The company is managing its cash very well. I would suggest buying the stock when that top line gets moving to the upside.
Stay tuned for more in this adventure.

Comments and questions are welcome.

eFood- Catching a Bit of a Bid

In case you hadn’t noticed, EFSF has been catching a little bit of a bid of late. I believe I know why.

First- I want to comment on their recent press release concerning the “relaunch” of the DR campaign after evaluating the test phase and making changes. In my view, for these products and the future of the way they are marketed, this is do or die. They tried marketing through traditional retail outlets, and it was a failure. They believe they have products consumers want and need. I do as well being a daily user of Cinnergen. There is no question they will get going with a big campaign- the bigger issue- will it work? That’s the speculation. The whole company is not pinned on these two products- Cinnergen and Cinnechol- however, I believe their credibility and judgment are pinned here, and they need to get a positive result.

Now, on to the recent apparent renewed interest in the stock:

One factor is seasonality. The stock is very oversold, and seems to have found a bottom. Everyone who wanted out has gotten out. Short covering might be helping with a bid. Shorts know the company isn’t going to zero, and the summer doldrums are nearing an end. They might be thinking they’ve rung out as much profit as possible.

However, I believe a far bigger issue for a few folks willing to take a flyer is the recent appearance of the painfully long awaited PurEffect web site. It could be a signal that this product is finally ready to launch- I make it about a 15 month delay from when I first heard about it.

If you go to www.pureffect.com, you will find a live web site without much substance- yet. There’s a rotating picture on the lower right, and an order tab that doesn’t let you order anything.

The stock enjoyed a little volume surge on Thursday and Friday, and seemed to firm up just a bit.

I think it’s kind of funny. People like to complain about this one more than just about any stock I cover, but they’re still looking for a reason to buy the stock at this low level to profit from a rebound.

We’re far from out of the woods on this idea, but at least it’s a glimmer of progress at long last. Coupled with the recent announcement of the relaunch of the DR campaign, there is a good chance this one will turn in the right direction at least for a little while. Eventually, they will have to deliver the goods.
Comments and questions are welcome.

eFoodSafety Annual 10K Report- All Priced In

Earlier this week, EFSF filed its annual 10k report, which was due out by the end of July. The company has a weird fiscal year- It ends at the end of April. Hence, they have 90 days to publish their annual 10K filing, the most important SEC filing of the year.

By the time you read 10Ks, they are pretty dated information. Based on the information coming out of the company, it’s not too hard to predict how their financial condition might have changed since the end of April- probably, not much. Perhaps their cash levels are still decent, but their top line, which is the real issue here, has probably not improved much. The next financial filing will be the Q1 10Q, which is due out by mid September, and will let us know if their DR initiatives are working at all.

As of the end of April, the company’s balance sheet was still reasonably strong for their size. They had nearly $2 million in cash, receivables, and inventory- which I view as a source of cash- $1.5 million of it being actual cash. Conversely, they only had $145,000 in payables and no long term debt or obligations. In short, the ratio of assets to liabilities was excellent, albeit it pretty small numbers for a public company. This is the highlight of their financial condition.

On the minus side was the top line- or the revenue number. Throughout the course of their fiscal ’08, they managed to deliver $1.19 million in revenues- That compares to the $1.16 million they delivered in fiscal ’07- this equates to no growth, and there’s your big problem. Margins were a little lower and gross profits actually down- also not favorable.

One more negative to point out. Obviously, the company is experiencing ongoing losses- so- how does their balance sheet stay so healthy? A clue can be found in the number of shares I&O. The number of shares I&O at the end of fiscal ’07 was 112 million. At the end of fiscal ’08 it was 191 million. That’s dilution of 70%. Somewhere in that number is the reason the balance sheet has remained healthy, and also no doubt one of the contributing factors to the stock’s poor performance. It’s not a pretty picture.

So, fast forward to today. Their plan to get the top line moving was to bypass the retail outlets, and start selling their products directly to consumers through TV ads. They didn’t start the new campaigns until late March, and there has been little information coming from the company on the early results from those campaigns.

The market is assuming they aren’t adding much in additional sales yet. I have always believed these new programs would take a few months of fine tuning, so one needed to kind of see where the company was towards the end of calender ’08.

The picture here is simple. It that top revenue line can get moving, this stock could be fine and start trading back up. If the top line doesn’t move, the future holds more dilution, ongoing losses, and lower prices.

Here’s my view as I’ve said all along. If you’re still in this stock, you have decided to become a long term investor. As one, you can’t worry to much about the horrendous price today.

For me, the company needs to prove to me it can deliver annualized sales of $10 million by the end of this year. If they don’t, it will be time to take the pain and move on. I’m not saying they need to deliver $10 million this year. I’m just saying they need a monthly rate of about $800k by year’s end.

If a couple things fall their way, it could happen. The long delayed launch of PurEffect would help. Fine tuning and getting a strong result on their DR campaigns for their other commercial products would help as well. A licensing deal for Oraphyte would be a wild card to the upside.

There’s no point in putting up a chart. The stock is in the proverbial toilet, and I would be the last person to try to call a bottom. I would expect the stock to trade up quite easily if buyers resurface.

Something positive is bound to give this one a lift as we get out of the summer. The big question- will it be sustainable? We’ll see.

Comments and questions are welcome.

eFood in Equities Magazine

I know there hasn’t been a lot to chew on out of EFSF of late. I have been briefed on developments at the company. The DR program is being fine tuned, and they will be back out there soon with a bigger commitment.

There was an article that appeared in a recent edition of Equities Magazine. For informed followers of EFSF, there isn’t much in the article you don’t know. However, FYI, here’s a link. You can find it in the archive section on EFSF as well:

http://www.otcjournal.com/efsf/media/efsf_nhc.pdf

The eFoodSafety Limbo: How Low Can You Go?

Time for an update on eFoodSafety. The stock is not trading well. For all those who haven’t noticed, and I’m sure everybody has, the stock is trading at a new all time low.

What’s the problem? In my view, the market is making the assumption that the Direct Response campaign they launched around March 1st is not delivering exhilarating results. In fact, the company has not provided any disclosure that would give investors information suggesting the DR campaign is generating any kind of major result. Their last disclosure used the word “Moderate”. Here’s the quote: ” The results to date of the direct-response campaigns have shown an initial moderate increase in product sales.”

The press release went on to state the DR campaign had generated traffic to the ecommerce web sites for Cinnechol and Cinnergen far in excess of expectations. The problem- conversions to customers- implication- interest positive, but not closing the deal. Modifications being made.

I visited the ecommerce web site today- www.cinnergendirect.com- The video ran fine in my browser, and the content looked relatively compelling to me. I believe it was slightly different than the original version, and perhaps is now generating better conversions.

It was never my expectation sales would go through the roof as soon as a few commercials ran. In fact, in my interview with Tim O’Leary, CEO of Respond2, he suggested these kinds of campaigns are often successful after a period of trial and error.

Technically, there’s no way to sugar coat the truth. The stock is a mess. $.165 had served as support since October of 2004 when this stock first traded.

I had set my SSL (suggested stop loss) at $.16. Therefore, if you are still holding the stock, it has either not dropped to your personal SSL, or you are simply a long term investor, in which case you don’t care about a stop loss level.

Technically, I can’t call any sort of bottom. We are into uncharted territory. Here’s a long term chart as measured on a weekly basis since it first started trading:

You can see the blip to a new all time low. I’m not sure it’s a fundamental issue. I believe it’s more group related and seasonal. The stock is already trading as if we were in the heart of the summer doldrums. Low volume drift down.
Also, with recession looming and gas prices rocketing, discretionary consumer non durables is not the hottest group on Wall Street.

The company is in the lengthy process of developing a number of natural and non toxic health care solutions. These kinds of products have a big future, but money is tight now- even for speculators.

I’m still sticking with the theme I have stuck to throughout 2008. For the OTC Journal, they have until the end of 2008 to demonstrate they are capable of generating $8 to $10 million in annual revs. If they do it, I’ll hang in there and be excited. If they don’t, I’ll drop it and move on.

On May 1 EFSF entered it’s fiscal Q4. This means their year ends July 30- we won’t see a 10k until the end of October, and then a 10Q will be do shortly thereafter. It’s a ways out.

This thing is due for a break pretty soon. I have seen a number of smaller issues make new lows, shake everyone out, then rebound. If you’re looking for me to pound the table and say it’s a screaming buy, you will be disappointed. I can’t say that. It might be, but there is no technical data to suggest it.

I don’t know where the bottom is, but we’re due for a positive development. Perhaps a surprise on PurEffect.

If you are brave soul who’s not risk averse, get into this stock now. If you’re one of those kinds of guys who believes you have to buy when no one wants something, and the tide will turn, this could be a tailor made opportunity for you.

Technically, I cannot call this one a trade, so I would recommend traders stay away. I don’t believe there’s a lot of downside risk from here, but it’s impossible to call this the bottom. It might be. Time will tell.

As always, comments and questions are welcome.

eFoodSafety: Some Thoughts As We Move Through The Year

The disappointment and debate continues to rage about eFoodSafety. I get more commentary and comments about this company than any other that I cover.

I hadn’t had an opportunity to comment on this week’s news concerning the PurEffect product launch by CK41.

In case you need a refresher, here’s the story. Over a year ago, EFSF entered into a licensing arrangement with new kid on the block CK41. CK41 is newly formed company in the business of marketing products through infomercials. The company is run by a bunch of ex-Gunthy Renker folks, so they are battle tested and proven.

PurEffect is EFSF’s answer to Proactive- the product sold by informercial with celebrity endorsements used to treat acne. Their #1 spokesperson is Jessica Simpson. They have no real competition in this field.

EFSF has entered into an arrangement with CK41 wherein they provide the product, CK41 provides the whole marketing campaign, and profits are split.

Both EFSF and its shareholders expected CK41 to commence a marketing campaign a full year ago. It’s launch has been indefinitely delayed, and the delays are finally drawing to a close.

This past Tuesday, EFSF announced CK41 has finally committed to a marketing campaign launch date. According to the press release, marketing will begin in July in the form of “a multi level internet campaign” as Phase I.

Phase II will include 1 and 2 minute commercials, and 30 minute infomercials. The press release does not specify when Phase II will begin other that to state after Phase I.

Investors are pretty much sick to death of waiting for this program to get going, but now at least there is a firm commitment and date to get the whole thing rolling.

I was encouraged that they have finally committed to rolling out the campaign. CK41 has already spent a lot of money on video production including paying a number of celebrity endorsers for their time, and it seems like they really have to go forward sooner or later. However, I was disappointed that they left the timetable for “Phase II” open ended. I suspect they feel it’s not worth buying all that media in the slow summer months, and will really kick it up in September. Let’s hope that’s the plan.

Here’s my big picture view on EFSF. I believe investors have been waiting for EFSF to deliver a blockbuster product that gets a huge retail reception and delivers $100 million in top line revs with big margins.

I would love to see that happen. In my view, the more likely scenario throughout the remainder of this year will be a smaller contribution from a lot of different fronts.

If the current marketing plans yields a few million in sales for Cinnergen and Cinnechol, and PureEffect gets rolling with $3 to $5 million this year, by year’s end you have a company delivering $10 million in annual revs and a reasonable bottom line.

The company’s Q2 will be important in my view. Their fiscal Q2 is August, Sept, and October.

I believe the company needs to generate $2 to $2.5 million in that time frame. If they can’t achieve these kinds of numbers it will be time to consider moving on and abandoning the idea. However, between all the products in various phases of commercial release, this sales level should be achievable.

If it is achieved, the stock is probably a double from current levels with additional potential out in front.

I could show you the chart, but it’s pretty much the same look for sometime now. It trades between $.15 and $.20, and holds within that range.

If it trades much below $.15 to $.155, it might be time to look at capital preservation and get out. This train is not high speed yet, but appears to be slowly gathering momentum. I just hope the stock can follow suit and some point in the near future.

Comments and questions are welcome.

eFood: An Update On Scheduling

As you all know, I have been trying to get some info on commercial scheduling, so you can all have an approximate time to turn on the TV and watch the Cinnergen and Cinnechol commercials.

According to this week’s news, it appears the commercials are now being broadcast on Fox News, the Gameshow Network, Discovery Health, and the History Channel, and could eventually be viewed by as many as 300 million households.

I have learned that since we are still in testing phase, the scheduling can change on a moment’s notice. Therefore, the company does not want to publish a schedule at this time. If you were to look for the commercial at a certain time, and it didn’t appear as scheduled, the company is concerned investors will think there is a problem when there isn’t one.

I am informed this testing phase will go on for about thirty days- through the month of April. Once past, the schedule should be more predictable.

In the interim, you can view a couple different versions of the commercial at the respective web sites of the products, or just watch any of the above mentioned networks at your leisure.

Both these web sites appear to be very well done commercial sites. I note this, because there has been some griping in the past about their web presence. Visit www.cinnergendirect.com and/or www.cinnechol.com to view the respective clips.

Musings Of Larry Isen On Today’s Action: 3/25, 10:20 Pacific

This will be the first in a new series of daily blogs with some observations about today’s market action, especially as it applies to the current ideas I have in front of subscribers.

Open LEH Puts:

Well, the trade is working well so far. Earlier today I was up $2k on an $8k investment from last Friday, and tempted to lock in. Gave back $500 so far. However, since LEH was down yesterday on a huge up day in the markets, I have no reason to believe the stock is ready to head back up. Some downgrades today from brokerage firms, and they are rumored to be awash in bad mortgage paper. Let’s hang in another day.

VTOK: New Idea

The response to new idea VTOK was pretty anemic. I believe the story is reasonably compelling, but I don’t think the market really gets how big the Amerivon relationship will be. More will come out in the future.

SPKL:

Stock continues to languish on light volume. The company is doing great, but the stock needs a catalyst to get it moving again. They came out with their 10K, so I will do an in depth BLOG on it. Big winner in the next bull market.

EFSF:

Stock firming a little in a pretty brutal micro environment. I like the second test of the lows, and some volume starting to show up. Might get some legs in this one.

PNWIF:

Showing some signs of life today as it is oversold in a news vacuum. Costco services should start soon. Big winner in the next Bull market.

AAPL:

I missed it waiting for the all time bargain basement steal. I don’t believe the volatile madness is over, so might get another chance.

CREE:

In no man’s land. Sticking with my plan. I have my 2k shares in the mid 28′s- will buy more if I see it back in the $25 to $26 range- will sell calls against it in the $30s. Today, nothing to do at $29+.

Overall Market:

After a huge week and a big Monday, the market should be giving some ground, but it’s not. Bullish, but still half the day to go. The environment is finally improving a little, and perhaps the micro will start to show some signs of life before too long.

eFood Quarterly Numbers: Setting the Stage

EFSF released fiscal Q3 numbers today, and there really isn’t anything but positives in the numbers. I looked, but I can’t find much of anything negative to say.

In fact, the balance sheet improvements are quite remarkable. For a pretty small company only doing about $1 million in annual sales, the balance sheet is great.

As of the end of January, EFSF had no debt, $1.13 million in cash, 428K in receivables, and $1.6 million in prepaid expenses. Guess what the prepaid expenses are? Advertising media buys for the coming campaigns.
On the minus side, you have $100k in payables- big deal. This balance sheet has improved by leaps and bounds in the past year.

There is one minor negative I could find- Shares I&O increased to 180 million from 165 last quarter. This is the price of not being profitable, and raising $1 million in cash. Note the big expense on the income statement for consulting- most of the share increases are built into that number.

On the revenue side – the percentage increases are great, but the top line number is still too low- only $310k for the quarter, which was more than 3 times the same quarter one year ago. Not enough, but the big media campaigns are about to start.

efsf11.gif

As you can see from the chart, the headlines are driving small stocks down, and EFSF is not immune.

The stock tried to break out above that downtrend line, but couldn’t hold. Might be a great mulligan for those who didn’t participate when it traded up in the past two weeks.

This company is perfectly positioned to launch these Direct Marketing campaigns. It’s starting by the end of the month. If it works, and the market starts behaving better, this one could really pay off from these levels.

EFSF Interview With Respond2: Your Comments

I am posting this BLOG at about 9AM Pacific, Thursday morning. The chart below is hinting at some signs of life for EFSF. By the time you read this, I’m sure it will be later, so I don’t know how the chart will look then.

Here’s the chart:

efsf1.gif

As you can see, the stock hasn’t been much fun to own for the past year. However, the chart is showing signs of life. The Gap at $.18 from early 2007 has been filled, which is a technical positive, and the stock is trying to break out above a very long term downtrend line.

While the technical picture is finally improving slightly, the real purpose of today’s BLOG is to give you the opportunity to comment on the interview with the Tim O’Leary, the CEO of Respond2.

Here’s what I’d like to know. 1. Did you find the commentary valuable? 2. Do you feel Respond2 is the answer to the sales side of the equation for this company?, and 3. Has hearing the interview changed your viewpoint on the future of EFSF.

Of course, comments and questions on any other EFSF related issues are welcome. Remember, you comment won’t appear until I respond and post it to the site. Check back the next day.

eFood, Like A Homing Pidgeon, Goes Back to the Coup

It seems there is a magical force in the Universe to which all things gravitate. I am writing this today to inform you EFSF has succumbed to the forces of gravity, and headed just where I thought it might head in a year end tax selling blow out (see the last BLOG on 12/14). That’s what a lot of these kinds of stocks do when shareholders have been disappointed by a shortfall in anticipated results.

Without further ado, here’s the chart. I’ve blown it up and extended it to make the gap as identifiable as possible. Look at the two green horizontal lines that delineate the gap, and its subsequent filling earlier today.

efsf12.gif

The stock has now officially completed a round trip from the level it was when I first wrote about the company.

That gap you see on the left side of the chart was created the first time I wrote about the stock.

Like a homing pigeon, the stock has flown back to its coup. Vacuum filled. Nature happy.

Fundamentally, all I can say is the company is improving. Technically, now is the time to swoop in and grab this stock if you are a buyer. You know all the facts about the company. I have certainly covered them over, and over, and over again. Don’t construe this to be my recommendation you should buy the stock today. There is a lot of controversy and disappointment, and you can read all about it in the archives. I’m saying now is the time if you are a buyer.

If you like the company and you want to own more stock, set aside your fears. Despite already owning 1 million shares which become eligible to be free trading next month, I might jump into 100k for a trade in the am. Since I own a lot, this would just be a trade for me. You might think a bit more long term depending on your goals.

Comments and questions are welcome.

eFoodSafety Quarter: Time To Leverage the Assets

It’s all about monetizing assets. EFSF has assets- their products are their assets. They don’t appear on the balance sheet, but they are there. If they want their stock to trade much better than it currently is, they have to monetize those assets- or at least make investors believe they are going to monetize those assets.

Current quarterly numbers came out yesterday morning, and there were no big surprises. Quarter over quarter, revenues were up very nicely over the same quarter one year ago, and the company is continuing to do a nice job managing its cash.

Between cash and receivables, they still have over $900k, and liabilities are less than $100k. Who ever heard of a public company with less than $100k in liabilities?

Also, top line revenues are growing nicely- albeit not fast enough for shareholders, but nevertheless at a healthy clip. The top line, thanks to Cinnergen sales, was up from $198k to $327k- an increase of 65%- S&P 500 companies never deliver this kind of growth.

My conclusion- I still see this company as a kind of option that won’t expire on some very good products. They have a good portfolio, and they need to figure out how to monetize that portfolio to benefit their shareholders.

I believe steps are being taken to move in that direction starting next year. If they line up the right sales force, it will be interesting to see if the market is willing to give the company the benefit of the doubt before the sales roll in, or if the market needs to see the numbers come.

I’m not trying to defend their snail’s pace to market, I’m just pointing out some of the positives. I get enough negative feedback on the company, so I’m looking at the other side.

Considering the anemic sales history vs what we were led to expect, the company could be in far worse shape than it is. They can manage slow progress very well.

I want to be around to see how they manage prosperity.

The chart remains about the same:

efsf11.gif

I still believe this stock is a screaming buy if it comes back and fills the gap you see circled at the left side of the chart. For that to happen, it would have to trade down to $.18.

It has tried to get back there, but doesn’t seem to want to trade below $.20. It might never do it.

The lack of sales is already priced into the stock. The detractors are vocal, and have gotten their message to the company.

I believe there is lots of upside when everyone is so negative. Tax selling may force this one to stay in this range or go down a little for the remainder of the year.

It’s an accumulation right now- a screaming buy- even for a trade, if you see $.18.

eFoodSafety: Thoughts and Musings

EFSF- more news on the path to the retail shelves for the product they believe could be applied transdermally as a potential preventative measure and/or therapy for MRSA Staph.

They announced the company would be going into a laboratory, and using a “Gold Standard” test to determine its efficacy.

Test results will be the first step- assuming a positive result, the path to the store counter would have to be next. However, it strikes me that they would have to show it works in an actual human application somehow, which might be tough. We’ll see how it all pans out. It’s another opportunity in the portfolio of IP that “could” turn into something big.

On to the main topic- the one of concern to the followers of this company- when are they going to generate more robust sales?

Disciples seem to have a very short fuse on this issue these days. Most of the emails of BLOG comments I receive are centered around that issue. Investors tend to be viewing the recent slate of product developments almost as a kind of slight of hand- a distraction if you will to avoid the main issue.

Here’s what I know- the company is moving in the direction of superior distribution for its existing products. They are in CK41′s back pocket nearly daily- putting their best foot forward to get that moving. They are pushing forward on several other fronts that might prove very fruitful.

In the meantime, considering the current microcap market malaise, and the current level of shareholder unhappiness, this issue might be plagued with a bit of tax selling this year.

I’ve had a number of questions about last year’s January gap. Here’s the chart:

efsf1.gif

I’ve had to expand the chart considerably to show a daily going back that far, but nevertheless you can clearly see the gap.

On Jan 10, ’07 the stock closed at $.18. On Jan 11, the stock opened at $.21, and never came back. Chartists call this a “gap”, and the theory is that all gaps eventually get filled. The whole in the chart acts like a kind of a vacuum to suck the stock back to that level, fill the gap, and start over.

I don’t believe there’s any logic to it. I do believe opportunistic traders will pounce on the stock if it ever does come back and fills that gap.

In the absence of any robust news on sales and/or a return to a healthy microcap environment this year, there is always the chance EFSF could “fill the gap”, at which point it would be a fantastic trading opportunity to go long.

I would guess the chances are worse than 50/50 for this drop for two reasons. 1. If investors wanted to make tax sales on this stock, they have probably done so already, and 2. I believe micros are going to pick up in short order.

Nevertheless, if this stock does fill that gap this year, I would pounce with reckless abandon. 2008 is a new year, with lots of new opportunity for achievement.

I’ve rarely seen a microcap company with so many potential blockbuster opportunities in its pipeline. I’m just asking for one big success.

Comments and questions are welcome.

eFoodSafety: Transdermal Citroxin Gets Under My Skin

More news out of EFSF this am on their newest product discovery. Just to review: Last week, EFSF announced a major breakthrough with a new application for Citroxin- their mold fighting product. In a clinical environment they proved Citroxin kills the highly publicized MRSA Staph better than the antibiotics currently used to treat it.

Today, just as the market opened, EFSF disclosed it has formulated a transdermal method for getting Citroxin into the blood stream. Transdermal does not work for all medications- molecule size has a significant effect on the compounds ability to actually get into the blood stream through the skin and be effective.

There are some questions that need to be answered. What is this new product’s path is to the store shelves? Does it require some sort of regulatory approval to be marketed, and what would be required to make the claim that it can be used to either prevent or treat MRSA Staph? My guess: EFSF will disclose its plan for a path to the store shelves over the coming weeks.

I was a bit disappointed last week when the market did not respond favorably to the revelation that EFSF had a potential all natural therapy for MRSA Staph. It’s a huge health issue, and a media darling. However, it’s another arrow in EFSF’s product quiver that could end up generating millions in sales under the right set of circumstances.

I believe investors are sending a loud and clear message to EFSF’s management- time to stop talking about products- time to start selling products. I’m sure management is listening and putting its best foot forward, but the market only appears to be ready to reward results.

Here’s the chart, and there’s not much to talk about:

efsf12.gif

As you can see, after having a rough summer in ’07, the stock has been grinding in the $.23 to $.26 range. It needs some kind of major catalyst to getting it moving back up the charts once again.

While it’s true that the company is far behind where we hoped it would be in their sales cycle, there are some positives I believe the market is overlooking. The stock has remained relatively stable in price over the last month against a backdrop of the overall market blowing its brains out- there’s one positive.

Secondly, their extensive portfolio of very exciting products suggests it is inevitable they will have some sort of big commercial win at sometime in the future- probably about when investors finally lose patience and throw in the towel (we might be there now).

Thirdly, I don’t believe the company gets much credit for their darn good financial condition against a backdrop of disappointing top line revenues. Based on early ’07 forecasts, Cinnergen, Cinnechol, and PurEffect should have both been delivering millions in revenues by now. They aren’t. Cinnechol isn’t even commercially available yet, and PurEffect is in the hands of marketing company CK41.

However, despite the less than stellar top line numbers, EFSF is generating enough sales to have the required cash in the bank, no debt, and loses have been minimized to a virtual zero. In fact, I wouldn’t be surprised to see the company turn a profit in the current quarter.

In summary, I believe EFSF is a heck of a good speculation right now. While the sales haven’t come in as expected, the risk profile has been reduced considerably by the near break even performance last quarter.

After the drubbing the markets have taken in the last month, this stock is probably poised for a rebound of some quality in the not too distant future. This is a great level for accumulation.

Comments and questions are welcome.

EFSF Delivers Year End Numbers

eFoodSafety finally got their annual 10K filing in late today, and everything is pretty darn ship shape on a go forward basis.

This financial statement is already nearly 3 1/2 months back, so it’s already kind of old news. When you read a 10k, you are looking for negatives the company might not disclose in a public forum. In short, I simply couldn’t really find any.

If you want to look at one minor negative- the number of shares I&O is climbing as the company uses stock to pay for a lot of stuff, raise capital, and reduce debt. As of July 9, there were about 164 million I&O.

On the plus side, the balance sheet is in absolutely great shape for a company in its development stage. They have no long term debt, and had about $1.1 million in cash at the end of April. Restricted shares were sold at $.25, which I believe is a very fair number for shareholders, to raise capital. Debt related to acquisitions was converted to shares at a number above the prevailing market- also more than fair to shareholders.

Revenues, primarily from sales of Cinnergen, climbed to $1.1 million for the year- double the previous year. This suggest a fairly robust Q4 as opposed to Q3 when they were just starting to sell Cinnergen.

All in all, for a development stage company with several commercial roll outs in the pipeline, they are positioned very well. Now, they just need to execute. PurEffect- here we come.

Here’s a look at the chart:

efsf1.gif

The stock has been going through a little consolidation phase, which I believe is a very bullish sign considering the drubbing the market has taken of late.

In short, this stock is poised to run up. I think it’s highly unlikely the stock will go down on the 10k- there really isn’t anything in it to spook investors.

I’ve included the 200 day moving average, which some avid followers of this stock tell me is the key swing point. A stock trading above its 200 day moving average is considered in a long term uptrend. The 200 day MA on EFSF is about $.31.

A little volume surge to the positive and off we go if they are right. Right or not, I believe this one could be setting up for a great second half of the year.

As usual, comments and questions are welcome.

eFoodSafety: The Good, The Bad, and the Not So Ugly

EFSF is sitting in this mid $.30s range kind of grinding around. I wanted to share a couple of mid summer thoughts about this idea, and prepare you for what might be great, and what might not be so great.

Here’s what I am excited about today: PurEffect. PurEffect has the potential to be a huge product for the company. The CK41 team has launched a number of very successful products via infomercial, and now that we know the production has started, and there will be viable personalities endorsing the product, it makes for a great speculation at the get go. I have heard projections in the hundreds of millions in sales over the life cycle of the product, and in this case I believe we have a real shot. Remember- this is a recurring revenue product. Users must reorder monthly. If they use it and like it, sales could grow to unheard of levels.

Here’s a minor negative- Cinnergen- while I don’t know the exact levels, I can tell you Cinnergen is not taking off as robustly as the company would like. I know they thought retail distribution would be a little more widespread by now, and once the product gets on the retail shelf they have no control over how it is displayed. To their credit, they are taking matters in their own hands with the launch of the ecommerce site. All businesses will have challenges- it’s how they deal with the challenges that measures the upside. Eventually, this product should take off- Why? because it works. I know it works thanks to you. I have received emails from OTC Journal subscribers who are diabetics and take the product. They have reported to me that Cinnergen allows them to eliminate or take less of their medication. Once this is identified by the masses as a potential weight loss product, it could really rocket.

Oraphyte is simply a waiting game. I don’t know if Dupont will pick the product up for distribution, I can only hope. Someone erroneously reported that Dupont has rejected the product- it is not true- Dupont is in the testing phase right now.

Today, the company announced it will begin clinical trials for its Cold treatment, ColdZap. It’s probably a little early to factor this product into your thinking about the future, but if this is anything like Airborne, there is huge potential here as well.

Here are a couple of minor negatives you need to wrestle with if you are going to continue to be a shareholder: 1. You will no doubt here about AmeriFinancial registering to sell 1 million shares through Rule 144. This requires an SEC filing. I am informed Amerifinancial owns these shares through the settlement of a law suit. I am also informed they are limited to 10,000 shares per day and no more than 10% of the previous week’s total volume. This will not result in any major supplies hitting the market and sabotaging the stock price. However, the market makers might use the information to knock the stock down, in which case it would be a buying opportunity. I don’t know if this is the only incident of its kind pending, and I don’t know anything about the law suit. However, it is a non event in my view except in how it could effect the way the stock trades.

2. Minor negative, and this is ongoing- simply the number of shares I&O. Over the years, as this company has developed and had a couple of false starts, the number of shares I&O has grown to a pretty big number. The last quarterly number was 156 million, meaning at $.35 the market is saying the company is worth $56 million. 18 months ago there were 128 million I&O, so the number is remaining under control and growing at a very reasonable pace for a virtual pre revenue company. However, in order for the stock to go up $.10, the market must buy into believing the company is worth $15 million more. With the products they have ready for commercialization, it will take a bit of good fortune to see this one rolling up to $1 or more, but that’s the nature of speculation.

I won’t bother with the chart today. You will see a stock that has weathered it’s summer capitulation phase and has rebounded off the bottom. It is gathering the energy for another move- I’m not sure which way, but we are closing in on commercialization as some really big numbers over the coming months and years.

Comments and questions are welcome.

eFoodSafety Going Head To Head With Pro Active

Now that the cat is out of the bag on Pur Effect, EFSF is wasting no time getting to work on going head to head with the virtually unchallenged leader in the specialized acne treatment world.

Today, just after the market opened, EFSF announced it had completed a study showing 94% of participants preferred Pur Effect’s 4 step treatment over a standard 3 step treatment.

While it doesn’t say so for competitive reasons, this is really a frontal assault on the strangle hold ProActive has on the Acne treatment market.

Personally, I believe the company is making all the right moves on this one. Unlike Cinnergen, where they are at the mercy of the retailers in terms of product placement, they are completely in control of their destiny with Pur Effect with its planned infomercial marketing.

Moreover, they have teamed up with some pros who have a long history of successful product launches via infomercial, generating hundreds of millions in sales.

And- even better- they don’t have to take one dime of risk. CK41 will put up all the money for the marketing campaign, and they will just split the profits.

Bottom line- I really like what’s happening here. Here’s the chart:

efsf12.gif

In short, the chart looks great. You can see the summer low, and you can see the nice uptrend in the stock. I feel the downside risk at this point in somewhere in the $.28 to $.32 range. The upside is a new all time high sometime later this year. In short, just buy this thing whenever it’s near the blue line. If it trades below $.28, you might want to sell to protect your principal, but I believe the summer low has been made.